Category: taxes

What do you guys think of this? Would you ever report a boss, colleague, or family member in exchange for a reward from the IRS? I can’t say one way or the other if I would or not, as I guess it would depend on who it was and how much it was for. According to this article I just read at CNN, with the economy struggling to stay afloat, the IRS is expecting more tax cheats this filing year. And if you decided to turn in a tax cheat, you could receive up to 15% of the amount that has been underpaid, with a maximum award of $10 million. OK, for a $10 million dollar reward I would definitely turn someone in for sure!

President Obama recently signed into law a bill that allows you to claim any donations you may have made to the Haiti relief effort on your tax return for last year (2009) or the current year (2010). If you donated any money between January 11th – March 1st, 2010, you can claim it on your return for either 2009 or 2010, whichever you want. Personally, I won’t be taking the deduction at all because I don’t feel it is right to give money to those less needy – and then take a write-off for it. I have the money to give, so I should give it without strings. I have always felt this way and have always donated money with the same intentions. My donations of “goods” to the Salvation Army or Goodwill are claimed, but any cash money donated is never claimed. Am I being foolish? Maybe. But it feels better to me to give the money without wanting any of it back, so I don’t ever claim it. I gave an entire day’s earnings from my sites to the relief effort and I don’t want any of it back from my own government; those people have nothing and I have a lot, in the grand scheme.

It’s that time yet again! If you pay estimated taxes like I do, your Federal and State payments are due tomorrow, January 15th. I have been paying estimated taxes for many years now, and while I find it kind of a pain in the you-know-what, I truly enjoy working for myself on my own time. It’s definitely a trade-off to make sure I always put away enough money to pay the taxes every 3 months! I have a special “Taxes” account over at ING Direct that I put 30% of every dollar I make into, as I made the mistake 2 years ago of not setting enough aside – and boy did that hurt come April 15th. So I cannot recommend enough that you open an account just for your estimated taxes and fund it as well as possible.

Every year thousands of working Americans pay numerous bills and then realize they have little left to pay what they owe in taxes. Owing the IRS can be scary because if taxes go unpaid and unresolved you can potentially face some of the harshest collection mechanisms. Many taxpayers avoid the IRS because they cannot pay and are scared of what may happen when the IRS finds out they can’t pay. Understand that the IRS allows individuals to resolve their taxes that they cannot pay in various ways, no matter how bad their financial situation is. Before considering a tax payment plan or some other form of tax settlement is a smart idea to double check and make sure you have taken all possible deductions that you could have taken. If you have not done so already, you should have a tax professional take a look at your return to see if there is anything you missed. Every year there are new tax credits that become available that the average taxpayer is not aware of. It is also a good idea to check past tax returns as well. You will still be able to claim a refund up to 3 years from your filing deadline or 2 years from your last tax payment. So if you have missed deductions in the past you can file an amended tax return to offset what you owe this year.

With only a few weeks left in 2009, now is definitely the time to look ahead to 2010 and what it can mean for your finances. My brother is my accountant, so I leave most of the paperwork to him, but I still need to know what big changes might be coming along from year to year. So in order to help you (and me!) out, I went looking for information on what tax law changes we have in store for 2010, and this is what I found…